All-Star Panel: Fried BlackBerry a smoking gun in IRS scandal?

This is a rush transcript from "Special Report," August 26, 2014. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JOHN KOSKINEN, IRS COMMISSIONER: You confirm that backup tapes from 2011 no longer existed because they had been recycled pursuant to the IRS normal policy?

CLETA MITCHELL, ATTORNEY: All of these emails are backed up regularly for what is called the continuation of government location. This idea that the emails were eliminated is simply not true. And so when Judicial Watch asked the Justice Department attorneys on Friday, is that true that these emails exist in a cog location, they said yes, but that they are not going to try to retrieve them because it's too onerous. Well, that's a big difference between what they have been saying and what we are just learning now.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: It seems like we have a new development every day on this IRS investigation. You may not know that if you have tuned in to it any other channel or any paper around the country, but we have. Here is what the administration has said about this, quote, "There was no new backup system described last week to Judicial Watch. Government lawyers who spoke to Judicial Watch simply referred to the same email retention policy that Commissioner Koskinen had described had his Congressional testimony." There is also this issue of Lois Lerner's BlackBerry being wiped clean after the Congressional inquiries had started. We're back with the panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, you don't have to be a conspiracy theorist to see some sleight of hand going on here. It's not clear whether they really -- these backup tapes actually exist, and they are -- the administration is unwilling to go after and look at them, or if these are the ones that were referred to earlier and of which the administration has said they were searched and this stuff doesn't exist. We'll know that within a couple of weeks. The judge is a tough judge on this, and he is asking Judicial Watch to come and show if these are different. If they are, if this actually is something that the administration had known about, the IRS had known about, and it was pretending that this doesn't exist, that, I think, will be a huge development in this scandal.

BAIER: That is meant as no offense to the The Washington Post, by the way. Chuck, I know you have covered the story, but recently it has not shown up any place.

CHARLES LANE, THE WASHINGTON POST: Well, maybe that's because these revelations may not be quite as definitive as they are being portrayed. I think Charles has done a good job of explaining exactly why we don't know everything we need to know just yet. And a lot will depend on whether who is telling the truth here as to whether these are just kind of the same old backup tapes they have always been talking about or some new set of backup tapes. And I guess there is going to be a hearing in court on that and we will find out.

BAIER: As for the BlackBerry?

LANE: As for the BlackBerry, what I understand about the BlackBerry is that had the same emails on it that were supposedly on the backup tape. And so there wouldn't have been any extra information on that that they were going out of their way to destroy because they didn't know that the backup tapes were destroyed at the time they destroyed the BlackBerry. So, I mean it's -- we're now into like the derivative scandal off the original scandal, remember what that was, which was supposedly they were, you know --

BAIER: OK, here's what the testimony is for Judicial Watch, and they filed a lawsuit, and to their credit they get a lot more answer than Congress does or frankly reporters do. Here with one of them, the declaration by Stephen Manning the deputy chief information officer for strategy. He said "There is no record of any attempt by the IRS IT employee to recover data from any BlackBerry device assigned to Lois Lerner in response to the Congressional investigations or this litigation." Hold on. Then it goes on to say, by Thomas Kane, the deputy associate chief counsel, "Attached is exhibit a, is an IRS, asset information sheet which reflects that on November 12th, 2009, the IRS issued a BlackBerry device, IRS bar codes on so, to Lois Lerner. The BlackBerry device was removed or wiped clean of any sensitive or proprietary information and removed for scrap as disposal in June 2012."

LANE: It doesn't say that there is some different set of emails on that BlackBerry.

BAIER: OK. George?

GEORGE WILL, SYNDICATED COLUMNIST: I can just hardly wait until the IRS lawyers go into that courtroom and tell the judge that it would be too onerous to stop instructing justice in this case. That's a really interesting defense. Lily Tomlin, the comedian, used to have a character, the bag lady, who said no matter how cynical you get you just can't keep up. And that's the way it was with the IRS.

Remember, this thing began in deceit with Lois Lerner planting a question to reveal this getting ahead of the inspector general of the IRS report. Then there were a few rogue agents in Cincinnati. The IRS is the most intrusive and potentially punitive institution of the federal government, and it is a law enforcement institution, and it is off the rails and it is now thoroughly corrupted. And people are saying, well, the Justice Department can take care of this. There is a reason why Jack Kennedy had his brother attorney general. There is a reason why Richard Nixon had his campaign manager John Mitchell, attorney general. It's an inherently political office and it can't be trusted in cases like this.

KRAUTHAMMER: And cover-up is not a derivative scandal. It is a worse scandal. Obstruction of justice would be a major scandal, even exceeding the original offense. And that's why they are so scared on the IRS side.

BAIER: We'll talk about it again. That's it for the panel.

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